Will Seattle home prices continue to rise throughout 2018? Economists seem to think so, and current conditions within the housing market seem to support that prediction.
Will Seattle home prices continue to rise faster than most other cities in the U.S.? There’s a good chance for that as well. The latest release of the Case-Shiller Index shows that the city is still outpacing the national average, in terms of year-over-year price growth.
Case-Shiller: Seattle Still Posting Double-Digit Gains
On January 30, the latest installment of the CoreLogic Case-Shiller Home Price Index came out. And it showed that Seattle continues to lead the nation in terms of year-over-year house value appreciation.
According to the latest report, the city posted a gain of 12.7% from November 2017 to November 2018 (the latest data available at the time). That was by far the biggest annual increase in home values of any city tracked by this particular index. Seattle also outpaced the nation as a whole, which posted an average gain of 6.2% during that same 12-month time period.
According to the authors: “In November, Seattle led the way [in home value growth] with a 12.7% year-over-year price increase, followed by Las Vegas with a 10.6% increase, and San Francisco with a 9.1% increase.”
Will Seattle Home Prices Keep Rising in 2018?
This leads to a common question among homeowners and buyers alike: Will Seattle home prices keep rising throughout 2018? While no one can predict future real estate trends with total accuracy, the consensus among housing analysts is that home prices in the Seattle area will continue to rise during 2018 (year over year).
There’s plenty of demand for housing in the area. But that might not be the primary factor that is driving price growth. Economists point to a lack of supply as the main driving force that is boosting house values. This is true for many markets across the nation, but particularly in Seattle.
In the Case-Shiller report mentioned above, the authors pointed to this trend:
“Given slow population and income growth since the financial crisis, demand is not the primary factor in rising home prices … Without more supply, home prices may continue to substantially outpace inflation.”
In other words, the ongoing rise in house values in Seattle and nationwide has more to do with low supply than high demand. And these conditions probably won’t change significantly for some time, based on the current level of construction and the sustained demand for housing.
An Outlook for Continued (but Smaller) Gains
So, will home prices in Seattle keep rising over the coming months? Most experts think they will.
The economic research team at Zillow, for example, recently issued an updated forecast for the Seattle real estate market extending through January 2019. They expect prices in the city to rise by around 5.7% over the next 12 months. (This prediction was issued in January 2018.)
They also reported a whopping gain of 16.2% over the previous 12 months. So their forecast for the next year is much more conservative than the actual gains recorded over the last year. And that’s probably a good thing. House values in Seattle have been rising much faster than wages and income, and that kind of trend is generally not sustainable over the long term.
But there are just forecasts. They are the equivalent of an educated guess. So we probably shouldn’t get too wrapped up in the exact numbers being projected here. The bottom line is that home prices in Seattle will likely continue rising throughout 2018 (according to many analysts) due to chronically low supply.